Paul Volcker on Henry Kissinger
TL;DR
Paul Volcker and Henry Kissinger were high-level government colleagues who co-developed key economic policy shifts in the early 1970s.
Key Points
Kissinger headed the National Security Council, which oversaw the international monetary policy committee Volcker was chosen to lead in 1969.
Kissinger was in Paris negotiating with North Vietnamese when President Nixon made the unilateral economic decisions of August 15, 1971.
Volcker's 'Volcker group' presented Kissinger with a contingency plan in May 1971 that considered the "suspension of gold convertibility."
Summary
Paul Volcker's professional relationship with Henry Kissinger was characterized by high-level collaboration and shared responsibility for major economic policy shifts during the Nixon administration. While Kissinger, as the National Security Advisor, was focused on foreign policy, he oversaw the committee that Volcker, then Undersecretary of the Treasury for Monetary Affairs, was tasked to head regarding international monetary policy. This committee was created by a National Security Study Memorandum shortly after the President's inauguration in 1969.
Volcker later expressed concern about the reporting structure outlined in the initial memorandum, which placed Volcker's committee directly under Kissinger's purview. Despite this hierarchical arrangement, which Volcker noted he wanted straightened out, the two figures were involved in the critical 1971 decision to suspend the dollar's convertibility to gold, an event Volcker helped engineer technically through his 'Volcker group' work.
Frequently Asked Questions
Paul Volcker and Henry Kissinger worked closely together in high-level government positions during the Nixon administration on international economic policy. Volcker was appointed to head a committee on monetary policy that reported to Kissinger, who was then National Security Advisor.
Yes, Volcker's technical work was instrumental in the planning that led to the suspension of the dollar's convertibility to gold. While Kissinger was absent from the final Camp David meeting, Volcker's prior work was referenced in the National Security Study Memorandum he received.
When Volcker received the National Security Study Memorandum establishing his committee, he immediately told his superior, the Treasury Secretary, that the reporting line directly to Henry Kissinger did not look good. Volcker felt he should not be reporting to Kissinger as the head of his committee.
Sources9
US Dollar hegemony | The Spectator Australia
How the 'Nixon Shock' Remade the World Economy | Yale Insights
Paul Volcker: The Man Who Vanquished Gold | Mises Institute
Foreign Relations of the United States, 1969–1976, Volume XXXI, Foreign Economic Policy, 1973–1976
Federal Reserve Board Oral History Project: Interview with Paul A. Volcker
Paul Volcker's Long Shadow - Truthdig
A Conversation with Henry Kissinger at I-House – International House – NYC
Surplus recycling, currency unions and the birth of the Global Minotaur - Yanis Varoufakis
* This is not an exhaustive list of sources.